STOCK PURCHASE AGREEMENT

Exhibit 2.1

EXECUTION COPY

____________________

STOCK PURCHASE AGREEMENT

____________________

Between

ROHM AND HAAS COMPANY

and

K+S AKTIENGESELLSCHAFT

Dated as of April 1, 2009

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS

ARTICLE II

PURCHASE AND SALE

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE SELLER

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF THE PURCHASER

ARTICLE V

ADDITIONAL AGREEMENTS

ARTICLE VI

EMPLOYEE MATTERS

ARTICLE VII

TAX MATTERS

ARTICLE VIII

CONDITIONS TO CLOSING

ARTICLE IX

INDEMNIFICATION

 

 

ARTICLE X

TERMINATION

ARTICLE XI

 

GENERAL PROVISIONS

EXHIBITS

1.01(a)

Form of Closing Statement

1.01(b)

Form of Guarantee

1.01(c)

Seller’s Knowledge

2.02(b)

Allocation of Purchase Price

5.16	Form of MII Legal Entity Agreement

STOCK PURCHASE AGREEMENT, dated as of April 1, 2009, between ROHM AND HAAS COMPANY, a Delaware corporation (the “ Seller ”), and K+S AKTIENGESELLSCHAFT, a German stock corporation ( Aktiengesellschaft ) (the “ Purchaser ”).

WHEREAS, the Seller owns, directly or indirectly, (a) all of the issued and outstanding shares (the “ Company Shares ”) of common stock, par value $1.00 per share, of Morton International, Inc., an Indiana corporation (the “ Company ”), and (b) all of the issued and outstanding shares (the “ Holdco Shares ”, and together with the Company Shares, the “ Shares ”) of common stock, par value DKK1,000.00 per share, of Rohm and Haas Denmark China Salt Holdings ApS, a Denmark company (“ Holdco ”), formed for the purpose of holding a 45% equity interest (the “ JV Interest ”) in Morton China National Salt (Shanghai) Salt Co., Ltd., a Chinese joint venture company (the “ China JV ”); and

WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, the Shares, upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound, the Seller and the Purchaser hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01.   Certain Defined Terms .  For purposes of this Agreement:

“ Action ” means any claim, action, demand, lawsuit, arbitration, inquiry, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, including civil, criminal, administrative or regulatory, whether at law or in equity.

“ Affiliate ” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

“ Affiliated Group ” means an affiliated group within the meaning of Section 1504(a) of the Code or any similar group defined under similar provisions of US state or local law.

“ Agreement ” or “ this Agreement ” means this Stock Purchase Agreement between the parties hereto (including the Exhibits hereto and the Disclosure Schedule) and all amendments hereto made in accordance with the provisions of Section 11.07.

“ Ancillary Agreements ” mean the Transition Services Agreement, the MII Legal Entity Agreement, the Guarantee and the Replacement Note.

“ Business ” means the Morton Entities’ business of mining, extracting, producing, transporting and supplying Salt products serving the premium branded consumer, industrial and highway de-icing markets primarily in the US, Bahamas, Canada and China.

“ Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in The City of New York or Frankfurt, Germany.

“ Closing Working Capital ” means the Current Assets minus the Current Liabilities determined, in each case, as of the open of business on the Closing Date.

“ Code ” means the US Internal Revenue Code of 1986, as amended from time to time.

“ Company Indebtedness ” means (i) the consolidated amount of Indebtedness of the Group and (ii) the amount of Indebtedness, if any, of Holdco, in each case at Closing.

“ Competition Act ” means Part IX of the Competition Act (Canada), as amended, and includes the regulations promulgated thereunder.

“ Confidential Information Memorandum ” means the Confidential Information Memorandum, dated March 2009, provided in connection with the transactions contemplated by this Agreement.

“ control ” (including the terms “ controlled by ” and “ under common control with ”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise.

“ Conveyance Taxes ” means any sales, use, transfer, conveyance, ad valorem, stamp, stamp duty, recording or other similar tax, fee or charge imposed by any Governmental Authority upon the sale, transfer or assignment of real, personal, tangible or intangible property or any interest therein, or upon the recording of any such sale, transfer or assignment, together with any interest, additions or penalties in respect thereof.

“ Credit Sensitive Debentures ” means the Company’s 9¼% Credit Sensitive Debentures due June 1, 2020, issued pursuant to the Indenture, dated as of June 1, 1990 (as supplemented by the First Supplemental Indenture, dated as of April 28, 1997, among the Company, New Morton International, Inc. and First Trust National Association and by the Supplemental Indenture, dated July 3, 2003, among the Company, the Seller and J.P. Morgan Trust Company, National Association), between Morton International, Inc. and Continental Bank, National Association, as Trustee.

“ Current Assets ”   means the total amount of each of the line items specified as “Current Assets” in Exhibit 1.01(a), determined, in each case, as of the open of business on the Closing Date, with respect to the Morton Entities on a consolidated basis.

“ Current Liabilities ” means the total amount of each of the line items specified as “Current Liabilities” in Exhibit 1.01(a), determined, in each case, as of the open of business on the Closing Date, with respect to the Morton Entities on a consolidated basis.

“ Disclosure Schedule ” means the Disclosure Schedule attached hereto, dated as of the date of this Agreement, delivered by the Seller to the Purchaser in connection with this Agreement.

“ Dow ” means The Dow Chemical Company, a Delaware corporation.

“ Dow Consolidated Group ” means the consolidated group of which Dow is the parent.

“ Ecuador JV ” means Ecuatoriana de Sal y Productos Quimicos C.A., an Ecuadorian joint venture company.

“ Ecuador II JV ” means Morfecor, C.A., an Ecuadorian joint venture company.

“ Encumbrance ” means any security interest, charge, pledge, hypothecation, mortgage, lien or encumbrance of any kind, other than any license of, option to license, or covenant not to assert claims of infringement, misappropriation or other violation with respect to, Intellectual Property.

“ Environmental Law ” means any Law that relates to (a) pollution or the protection of the environment (including natural resources), (b) exposure to Hazardous Material or (c) human health.

“ Environmental Permit ” means any permit, approval, registration, identification number or license that a Morton Entity is required to possess under Environmental Law.

“ Excluded Taxes ” means (i) Taxes imposed on, payable by or attributable to the income of any Morton Entity or Holdco for a Pre-Closing Period or Code Section 481(a) adjustment resulting from an accounting method change in a Pre-Closing Period, (ii) with respect to any Straddle Period, Taxes imposed on, payable by or attributable to the income of any Morton Entity or Holdco which are allocable, pursuant to Section 7.01(b), to the portion of such period ending on the Closing Date and (iii) without duplication, any Taxes imposed on any gain recognized on the sale of the Company Shares hereunder ( provided , however , that Excluded Taxes shall not include Taxes (A) resulting from any act, transaction or omission outside the ordinary course of business of the Purchaser or any Morton Entity, any JV Entity or Holdco occurring after the Closing Date or any act, transaction or omission occurring after Closing on the Closing Date, or (B)  that would not have been imposed but for the Purchaser’s failure to satisfy any of its obligations pursuant to this Agreement).

“ Final Closing Statement ” means the statement setting forth the Purchase Price, the Company Indebtedness and the Closing Working Capital as agreed or determined pursuant to the procedures set forth in Section 2.06.

“ GAAP ” means US generally accepted accounting principles and practices in effect from time to time applied consistently throughout the periods involved.

“ Governing Documents ” means the charter, organizational and other documents by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, and shall include:  (a) in respect of a corporation, its certificate or articles of incorporation or association and/or its by-laws; (b) in respect of a partnership, its certificate of partnership and its partnership agreement; and (c) in respect of a limited liability company, its certificate of formation and operating or limited liability company agreement.

“ Governmental Authority ” means any federal, national, supranational, state, provincial, local or other government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body of competent jurisdiction.

“ Governmental Order ” means any order, writ, judgment, injunction, decree, penalty, stipulation, determination or award entered by or with any Governmental Authority.

“ Group ” means the Company and its consolidated Subsidiaries.

“ Guarantee ” means a guarantee from Dow in favor of the Purchaser Indemnified Parties in the form of Exhibit 1.01(b).

“ Hazardous Material ” means (a) petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials and polychlorinated biphenyls and (b) any other chemicals, materials or substances defined or regulated as toxic or hazardous or as a pollutant or contaminant under any applicable Environmental Law.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“ Indebtedness ”   means, with respect to the Group and Holdco, each of the line items specified as “Indebtedness” in Exhibit 1.01(a), and to the extent not included therein, without duplication:  (i) the principal of and any premium in respect of indebtedness for borrowed money, including any accrued interest and any cost or penalty associated with prepaying any such indebtedness, and including any such obligations evidenced by bonds, debentures, notes or inventory financing or similar obligations or any guarantee of the foregoing, (ii) all capitalized lease obligations that are classified as a balance sheet liability in accordance with GAAP, (iii) all reimbursement or similar obligations in respect of letters of credit, bank guarantees or similar obligations, (iv) all indebtedness arising out of overdrafts, acceptance credit or similar facilities, (v) any accrued and unpaid purchase price obligations related to acquisitions of the capital stock or assets of any third Person, (vi) all guaranties, endorsements, assumptions and other contingent obligations in respect of indebtedness for borrowed money of any other Person other than a Morton Entity, (vii) any Pension Deficit Amount and (viii) any Post-Retirement Welfare Amount; provided , however , the Credit Sensitive Debentures and any accrued and unpaid interest thereon shall not be considered Indebtedness for purposes of this definition or the preparation of the Initial Closing Statement or the Final Closing Statement.

“ Indemnified Party ” means a Purchaser Indemnified Party or a Seller Indemnified Party, as the case may be.

“ Indemnifying Party ” means the Seller pursuant to Section 9.02 and the Purchaser pursuant to Section 9.03, as the case may be.

“ Initial Closing Statement ” means a statement setting forth the Purchaser’s determination of the Purchase Price, Company Indebtedness and the Closing Working Capital prepared in accordance with the provisions of Section 2.06.

“ Intellectual Property ” means (a) patents and patent applications (including reissues, divisions, continuations, continuations-in-part, extensions and reexaminations thereof) Registered or applied for in the United States of America (“ US ”) and any other nations throughout the world, and national and multinational statutory invention registrations, (b) trademarks, service marks, trade dress, Internet domain names, trade names and corporate names (whether or not Registered) in the US and any other nations throughout the world, including registrations and applications for registration of the foregoing and any goodwill associated therewith, (c) copyrights (whether or not Registered) and registrations and applications for registration thereof in the US and any other nations throughout the world, including copyrights in computer software, and (d) trade secrets.

“ JV Entities ” means each of (a) the Ecuador JV, (b) the Ecuador II JV and (c) the China JV.

“ Law ” means any federal, national, supranational, state, provincial, local or administrative statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

“ Liabilities ” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, known or unknown, matured or unmatured, or determined or determinable, asserted or unasserted, including those arising under any Law, Action or Governmental Order and those arising under any contract, lease, agreement, arrangement, commitment or undertaking (excluding liabilities with respect to Taxes and Conveyance Taxes).

“ Licensed Intellectual Property ” means all Intellectual Property licensed to a Morton Entity pursuant to the Morton IP Agreements.

“ Material Adverse Effect ” means any event, circumstance, occurrence, development, change in or effect on (any such item, an “ Effect ”) any Morton Entity that individually or, when taken together with all other Effects, is, or would reasonably be expected to be, (A) materially adverse to the business, assets, liabilities, results of operations or the financial condition of the Morton Entities, taken as whole, or that (B) prevents or materially delays the ability of the Seller to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement; provided , however , that none of the following, either alone or in combination, shall be considered in determining whether there has been a “Material Adverse Effect” or a breach of a representation, warranty, covenant or agreement that is qualified by the term “Material Adverse Effect”:  (a) events, circumstances, changes or effects that generally affect the industries or segments thereof in which the Business operates (including legal and regulatory changes), (b) general business, economic or political conditions (or changes therein) or events, circumstances, changes or effects affecting the securities markets generally, (c) changes arising from the consummation of the transactions contemplated by, or the

 

 

announcement of the execution of, or any action taken pursuant to or in furtherance of, this Agreement or at the request of the Purchaser, including, to the extent arising therefrom, (i) any actions of competitors, (ii) any actions taken by or losses of employees, customers, suppliers, landlords or distributors, (iii) any delays or cancellations of orders for products or services, or (iv) any actions taken in connection with obtaining regulatory consents or approvals (d) any event, circumstance, change or effect caused by acts of terrorism or war (whether or not declared) occurring after the date of this Agreement, (e) changes or modifications in GAAP or applicable Law or interpretations thereof and (f) the failure by the Morton Entities to meet any estimates, expectations, projections or budgets (but not, the underlying causes of such failure); provided ,   that in the cases of clauses (a) and (b), such Effects shall not be excluded from the definition of “Material Adverse Effect” hereunder to the extent that such Effects, individually or in the aggregate, have a materially disproportionate effect on the Morton Entities, taken as a whole.

“ Mine ” means the mines listed in Section 1.01(a) of the Disclosure Schedule.

“ Morton Employee ” means each current or former employee or director of the Morton Entities.

“ Morton Entities ” means each of the Company and the Subsidiaries, but not including JV Entities.

“ Morton Intellectual Property ” means the Owned Intellectual Property and the Licensed Intellectual Property.

“ Morton IP Agreements ” means licenses of Intellectual Property (a) from any Morton Entity to a third party, excluding licenses to customers and end users granted in the ordinary course of business, and (b) to any Morton Entity from a third party, excluding “shrink-wrap” and “click-wrap” licenses and licenses of generally commercially available software.

“ Neutral Accountant ” means KPMG LLP.

“Non-Business Assets ” means any asset of any Morton Entity or Holdco (other than any JV entity) as at Closing that is not used in the conduct of the Business.

“ Non-Business Liability ” means (A) (i) any Liability of any Morton Entity or Holdco at Closing to the extent it does not relate to the Business and (ii) any Liability arising from (i) above in each case other than any Pre-Closing Environmental Liability and (B) any such Liability (in (A) above) transferred to, assumed by or imposed upon any Purchaser Reorganization Transferee.

“ Objection Deadline Date ” means the date 30 days after delivery by the Purchaser to the Seller of the Initial Closing Statement.

“ Owned Intellectual Property ” means all Intellectual Property owned by a Morton Entity.

“ Pension Deficit Amount ” means: (a) the difference between the projected benefit obligation as defined by SFAS No. 87 under the Pension Plan for the Morton Bahamas Limited Employees as of the Closing Date, determined using the assumptions used in the 12/31/2008 year-end SFAS No. 158 plan disclosures for the Pension Plan for the Morton Bahamas Limited Employees,   except that the discount rate actually used by such plan in such year-end disclosures shall be updated to reflect any changes in such discount rate between year-end and Closing, and the fair market value of the assets of the Pension Plan for the Morton Bahamas Limited Employees as of the Closing Date; plus (b) the difference between the projected benefit obligation as defined by SFAS No. 87 under the Canadian Salt Company Limited Employees’ Pension Plan as of the Closing Date, determined using the assumptions used in the 12/31/2008 year-end SFAS No. 158 plan disclosures for the Canadian Salt Company Limited Employees’ Pension Plan,   except that the discount rate actually used by such plan in such year-end disclosures shall be updated to reflect any changes in such discount rate between year-end and Closing, and the fair market value of the assets of the Canadian Salt Company Limited Employees’ Pension Plan as of the Closing Date; plus (c) the projected benefit obligation as defined by SFAS No. 87 under the Canadian Salt Company Limited Excess Pension Plan at the Closing Date, determined using the assumptions used in the 12/31/2008 year-end SFAS No. 158 plan disclosures for the Canadian Salt Company Limited Excess Pension Plan, except that the discount rate actually used by such plan in such year-end disclosures shall be updated to reflect any changes in such discount rate between year-end and Closing; plus (d) as to the Active Morton Employees who are active participants in the Morton International, Inc. Pension Plan for Collectively Bargained Employees (and, for the avoidance of doubt, for no other US-based Morton Employees) as of the Closing Date, the difference between the projected benefit obligation and the accumulated benefit obligation as defined by SFAS No. 87 under the Morton International, Inc. Pension Plan for Collectively Bargained Employees as of the Closing Date, determined using the assumptions used in the 12/31/2008 year-end SFAS No. 158 plan disclosures for the Morton International, Inc. Pension Plan for Collectively Bargained Employees, except that the discount rate actually used by such plan in such year-end disclosures shall be updated to reflect any changes in such discount rate between year-end and Closing.

“ Permits ” means all franchises, grants, approvals, licenses, permits, awards, determinations, registrations, identification numbers, rights related to mining, exploration, surface and water, variances, consents, certificates and other authorizations of any Governmental Authority.

“ Permitted Encumbrances ” means (a) statutory liens for Taxes not yet due or delinquent (or which may be paid without interest or penalties) or which are being contested in good faith and for which appropriate provision has been made, (b) mechanics’, carriers’, workers’, repairers’ and other similar liens arising or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of the Seller or any Morton Entity, as the case may be, (c) any Encumbrances that would be set forth in any title policies, endorsements, title commitments, title certificates and/or title reports relating to the Seller’s interests in real property, zoning, entitlement, conservation restriction and other land use and environmental regulations by Governmental Authorities which do not materially interfere with the use of the assets of the Morton Entities as conducted at the date of this Agreement, (d) all covenants, conditions, restrictions, easements, rights-of-way, other Encumbrances and other similar matters of record set forth in any state, local or municipal franchise under which the

 

 

Morton Entities conduct their business, (e) any internal leases, subleases, occupancy agreements or licenses between any of the Morton Entities, (f) minor encroachments including but not limited to foundations and retaining walls, (g) minor variations, if any, between tax lot lines and property lines, and (h) minor deviations, if any, of fences or shrubs from designated property lines.

“ Person ” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

“ Post-Closing Legal Entity Transfer Right ” means the right of the Purchaser to convey the Shares of the MII Legal Entity (as defined in the MII Legal Entity Agreement) to the Seller pursuant to the MII Legal Entity Agreement.

“ Post-Retirement Welfare Amount ” means the value, at the Closing, of the accumulated postretirement benefit obligations (as defined by SFAS No. 106) under any of the Transferred Plans related to medical or health benefits, or life insurance or other benefits (through insurance or otherwise) for any Morton Employee in Canada or the Bahamas only or any eligible dependent or beneficiary of any Morton Employee in Canada or the Bahamas after his or her retirement or other termination of employment, determined using the assumptions used in the 12/31/2008 year-end SFAS No. 158 plan disclosures, except that the discount rate actually used by such plan in such year-end disclosures shall be updated to reflect any changes in such discount rate between year-end and Closing.

“ Pre-Closing Environmental Liability ” means any Liability relating to or arising from (a) (i) any pre-Closing Release of any Hazardous Material (A) by a Morton Entity or any predecessor of a Morton Entity or (B) at, on, in, from or migrating to or from any Owned Real Property or any real property formerly owned or operated by a Morton Entity or any predecessor of a Morton Entity, or (ii) any Release of any Hazardous Material at any real property to which, prior to Closing, a Morton Entity or any predecessor of a Morton Entity sent any such Hazardous Material for treatment, storage or disposal that, in the case of (i) or (ii) requires Remedial Action under applicable Environmental Law or results in a natural resource damage claim, (b) any violation of or non-compliance with any Environmental Law or Environmental Permit on or prior to Closing by a Morton Entity or any predecessor of a Morton Entity, (c) any Action against any Morton Entity or any Purchaser Reorganization Transferee relating to any violation or alleged violation of Environmental Law on or prior to Closing, (d) any pre-Closing exposure to any Hazardous Materials at any Owned Real Property or Leased Real Property, and any exposure to any Hazardous Materials from any product sold or distributed by a Morton Entity prior to Closing, (e) any contractual defense or indemnification obligation, in either case entered into prior to Closing, owed by a Morton Entity or any Purchaser Reorganization Transferee to a third party relating to any pre-Closing Release of any Hazardous Material or pre-Closing exposure to any Hazardous Material at any Owned Real Property or Leased Real Property, and (f) remediation, reclamation or rehabilitation of any mine that ceased operation prior to Closing, except to the extent that any such Liability in (f) (i) has been accounted for in the Business Financial Statements, or (ii) has been caused or exacerbated by the negligence of Purchaser.  For purposes of defining “ Pre-Closing Environmental Liability ” only, “ mine ” shall mean any real

 

 

property, whether owned or leased, including subsurface, surface and the fixtures associated therewith, of the Morton Entities that is used for mining or extracting Salt.  Without limiting the foregoing, Pre-Closing Environmental Liability shall include any Liability relating to or arising from pre-Closing Releases of any Hazardous Materials, or any pre-Closing or post-Closing migration or leaching of such pre-Closing Released Hazardous Materials, at or from the Ventron/Velsicol Superfund Site in Wood-Ridge, New Jersey, the Berry’s Creek Study Area, the Moss Point, Mississippi plant site, the Kankakee, Illinois plant site, the plant sites divested by any Morton Entity to BASF prior to Closing, the Lower Passaic River Study Area and Newark Bay Study Area of the Diamond Alkali Superfund Site in Newark, New Jersey, the Fike/Artel Superfund Site in Nitro, West Virginia, the North Enterprise disposal site in Trenton, New Jersey, the disposal site in Kellet, South Carolina, and the Malone Services Company Superfund Site in Texas City, Texas, and the Goose Farm Superfund Site in Plumstead Township, New Jersey to the extent such migration or leaching is not caused by any action or negligent omission of Purchaser.

“ Pre-Closing Period ” means any taxable period ending on or prior to the Closing Date.

“ Purchase Price Bank Account ” means a bank account or accounts in the US to be designated by the Seller in a written notice to the Purchaser at least five (5) Business Days before the Closing.

“Purchaser Reorganization ” means the transaction or series of transactions undertaken by the Purchaser and its Affiliates following the Closing in order to, among other things, transfer, directly or indirectly, all of the Salt Assets and Salt Liabilities to one or more Purchaser Reorganization Transferees.

“Purchaser Reorganization Transferee ” means each Affiliate of the Purchaser that is a direct or indirect transferee of any Salt Assets, or that assumes any Salt Liabilities, in the Purchaser Reorganization.

“ Reference Balance Sheet ” means the consolidated balance sheet of the Business as of the Reference Balance Sheet Date.

“ Reference Balance Sheet Date ” means December 31, 2008.

“ Reference Working Capital ” means $215,000,000.

“ Registered ” means issued by, registered or filed with, renewed by or the subject of a pending application before any Governmental Authority or Internet domain name registrar.

“ Regulations ” means the Treasury Regulations (including Temporary Regulations) promulgated by the US Department of Treasury with respect to the Code or other federal tax statutes.

“ Release ” means disposing, discharging, injecting, spilling, leaking, pumping, pouring, leaching, dumping, emitting, escaping or emptying into or upon any air, soil, sediment, subsurface strata, surface water or groundwater.

“ Relevant Proportion ” means (i) 45% with respect to the China JV, (ii) 50% with respect to each of the Ecuador JV and the Ecuador II JV and (iii) 100% with respect to each Morton Entity and Holdco.

“ Remedial Action ” means any action required to investigate, clean up, remove or remediate, or conduct remedial or corrective actions with respect to, Hazardous Materials in the environment.

“ Salt ” means sodium chloride and potassium chloride.

“ Salt Asset ” means any asset used by any Morton Entity or Holdco in the conduct of the Business and each JV Entity.

“ Salt Liabilities ” means any Liability of any Morton Entity other than (i) any Non-Business Liability and (ii) any Pre-Closing Environmental Liability to the extent not relating to the Business.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Seller’s Knowledge ”, “ Knowledge of the Seller ” has the meaning set forth in Exhibit 1.01(c).

“ Straddle Period ” means any taxable period beginning on or prior to the Closing Date and ending after the Closing Date.

“ Subsidiaries ” means the entities owned or controlled, directly or indirectly, by the Company and identified in Section 1.01(b) of the Disclosure Schedule.

“ Tax ” or “ Taxes ” means all income, capital gain, gross receipts, windfall profits, severance, property, production, ad valorem, sales, use, transfer, conveyance, stamp, recording, license, excise, net worth, franchise, capital, employment, withholding, workers’ compensation, unemployment insurance contributions and employment insurance contributions, goods and services, harmonized sales and other taxes, duties and similar imposts, however denominated, together with any interest, additions or penalties in respect thereof, imposed by any Governmental Authority (but excluding any Conveyance Taxes covered by Section 7.06).

“ Tax Returns ” means any and all returns, reports and forms (including elections, declarations, amendments, schedules, information returns or attachments thereto) required to be filed with a Governmental Authority with respect to Taxes.

“ Third Party Assurances ” means all guarantees, indemnities, counter-indemnities and letters of comfort of any nature given (i) to a third party by a Morton Entity in respect of any obligation of the Seller or any Affiliate of the Seller (other than a Morton Entity); and/or (as the context may require) (ii) to a third party by the Seller or any Affiliate of the Seller in respect of any obligation of a Morton Entity.

“ 2008 Company Financial Statements ” means the audited consolidated balance sheet of the Company as of December 31, 2008 and the audited consolidated statements of income and cash flows of the Company for the annual period ended on December 31, 2008.

“ Unresolved Objections ” means the objections set forth on the Notice of Disagreement delivered to the Purchaser pursuant to Section 2.06 that remain unresolved pursuant to Section 2.06(e)(iii).

SECTION 1.02.   Definitions .  The following terms have the meanings set forth in the Sections set forth below:

SECTION 1.03.   Interpretation and Rules of Construction .  (a)  In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

(b)           Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement or the Ancillary Agreements, the information and disclosures contained in any Section of Article III of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other Section of Article III of the Disclosure Schedule as though fully set forth in such other section to the extent the relevance of such information to such other Section is reasonably apparent.  For the avoidance of doubt where a Section of the Disclosure Schedule is in the form of a list, such list shall not be deemed disclosure of any matters set forth in the documents set forth in such list, unless such matters are specifically referred to in such Section.  No reference to or disclosure of any item or other matter in any Section of this Agreement, including any Section of the Disclosure Schedule, shall be construed as an admission or indication that such item or other matter is material or that such item or other matter is required to be referred to or disclosed in this Agreement.  Without limiting the foregoing, no such reference to or disclosure of a possible breach or violation of any contract, Law or Governmental Order shall be construed as an admission or indication that a breach or violation exists or has actually occurred.

ARTICLE II

PURCHASE AND SALE

SECTION 2.01.   Purchase and Sale of the Shares .  Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller shall sell, or cause one of its subsidiaries to sell, to the Purchaser, and the Purchaser shall purchase from the Seller, the Shares free and clear of all Encumbrances.

SECTION 2.02.   Purchase Price; Allocation of Purchase Price .  (a)  Subject to adjustment pursuant to Section 2.06, the purchase price for the Shares shall be the aggregate of

(i)

$1,675,000,000;

(ii)

minus the Company Indebtedness; and

(such aggregate amount as so adjusted being the “ Purchase Price ”).

(b)           The Purchase Price shall be allocated among the Company Shares and the Holdco Shares as of the Closing in accordance with Exhibit 2.02(b).

(c)           No later than the seventh Business Day prior to the Closing Date, the Seller shall prepare and deliver to the Purchaser a statement containing the Seller’s good faith estimate of the Purchase Price (the “ Estimated Purchase Price ”), with a calculation showing the Seller’s estimate of each of the items set forth in Section 2.02(a).

SECTION 2.03.   Closing .  Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares contemplated by this Agreement shall take place at a closing (the “ Closing ”) to be held at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York at 10:00 a.m. New York time on the seventh Business Day following the satisfaction or waiver of the conditions to the obligations of the parties hereto set forth in Article VIII (other than conditions that by their nature are to be satisfied at Closing, and subject to the satisfaction or waiver of such conditions) or at such other place or at such other time or on such other date as the Seller and the Purchaser may mutually agree upon in writing (the day on which the Closing takes place being the “ Closing Date ”).

SECTION 2.04.   Closing Deliveries by the Seller .  At the Closing, the Seller shall deliver or cause to be delivered to the Purchaser:

(a)           stock certificates evidencing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, or other appropriate deed of transfer;

(b)           a counterpart of each of the Ancillary Agreements executed by each party thereto other than the Purchaser;

(c)           a receipt for the Estimated Purchase Price;

(d)           the certificate referenced in Section 8.02(a)(iv);

(e)           a certificate of the non-foreign status of the Seller pursuant to Section 1.1445-2(b)(2) of the Regulations;

(f)           a true and complete copy, certified by the Secretary or an Assistant Secretary of the Seller, of the resolutions duly and validly adopted by the Board of Directors of the Seller evidencing its authorization of the execution and delivery of this Agreement and the

(g)           a letter of resignation from the position of officer or director, as applicable, and release, duly executed by such officers and directors of any Morton Entity as the Purchaser may notify to the Seller in writing not less than five Business Days prior to Closing.

SECTION 2.05.   Closing Deliveries by the Purchaser .  At the Closing, the Purchaser shall deliver to the Seller:

(c)           a true and complete copy, certified by an officer of the Purchaser, of the resolutions duly and validly adopted by the supervisory board ( Aufsichtsrat ) of the Purchaser evidencing its authorization of the execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby; and

SECTION 2.06.   Adjustment of the Purchase Price .

(a)           Within 75 days after the Closing Date, the Purchaser shall prepare and deliver to the Seller the Initial Closing Statement.  The Initial Closing Statement shall contain only the line items set forth on Exhibit 1.01(a).  The Initial Closing Statement shall be prepared in accordance with accounting policies and practices consistent with those used in the preparation of the Business Financial Statements and, to the extent not inconsistent with the foregoing, GAAP.

(b)           From the Closing Date until the delivery of the Initial Closing Statement, in order to allow the Purchaser to satisfy its obligations under this Section 2.06, the Seller shall (i) provide, or cause to be provided, to the Purchaser and its officers, employees and authorized agents and representatives, including any accountants retained by the Purchaser, during normal business hours and upon reasonable prior notice, reasonable access to the books, records and working papers of the Seller to the extent that they relate to the Morton Entities or are otherwise reasonably required for the preparation of the Initial Closing Statement and (ii) procure, during normal business hours and upon reasonable prior notice, that the individuals employed by the Seller or its Affiliates who prepared or were responsible for the preparation of the Company Financial Statements and the Business Financial Statements shall be made available to respond to the reasonable inquiries of the Purchaser and its officers, employees and authorized agents and representatives and shall otherwise cooperate with, and provide reasonable assistance to, the Purchaser in connection with the preparation of the Initial Closing Statement.

(c)           During the 30 days immediately following the Seller’s receipt of the Initial Closing Statement, the Seller and its officers, employees and authorized agents and representatives, including any accountants retained by the Seller shall be permitted, during normal business hours and upon reasonable prior notice, reasonable access to the books, records and working papers of the Morton Entities and their Affiliates reasonably requested by the Seller, and the Purchaser shall procure, during normal business hours and upon reasonable prior notice, that the individuals employed by the Purchaser and the Morton Entities who prepared or were responsible for the preparation of the Initial Closing Statement shall be made available to the Seller and the Seller's accountants in order to respond to the reasonable inquiries of the Seller and its officers, employees and authorized agents and representatives.

(d)           The Seller shall deliver to the Purchaser on or before the Objection Deadline Date either a notice indicating that the Seller accepts the Initial Closing Statement (“ Notice of Acceptance ”) or a detailed written statement specifying those items or amounts with which the Seller disagrees in the Initial Closing Statement, together with a reasonably detailed description of the reasons for its objections to each such item or amount, and a calculation of the Purchase Price, Company Indebtedness and Closing Working Capital based on such objections (“ Notice of Disagreement ”).  If the Seller delivers to the Purchaser a Notice of Acceptance, or the Seller does not deliver a Notice of Disagreement on or before the Objection Deadline Date, then, effective as of the earlier of the date of delivery of such Notice of Acceptance or the Objection Deadline Date, the Initial Closing Statement shall be deemed to be the Final Closing Statement.  If the Seller timely delivers a Notice of Disagreement, only those matters specified in such Notice of Disagreement shall be deemed to be in dispute, and all other matters included in the Initial Closing Statement shall be final and binding upon the Purchaser and the Seller.

(e)           The objections set forth on the Notice of Disagreement shall be resolved as follows:

(f)           The Initial Closing Statement shall be deemed to be the Final Closing Statement and binding on the Purchaser and the Seller for the purposes of this Section 2.06 upon the earliest of (x) the delivery by the Seller of the Notice of Acceptance or the failure of the Seller to deliver the Notice of Disagreement by the Objection Deadline Date pursuant to Section 2.06(d), (y) the resolution of all disputes by the Seller and the Purchaser pursuant to Section 2.06(e)(ii) and (z) the resolution of all disputes pursuant to Section 2.06(e)(iv) by the Neutral Accountant.  Within five Business Days after the Final Closing Statement becomes or is deemed final and binding on the parties hereto, a payment shall be made as follows:

(g)           Any payment required to be made by the Seller or the Purchaser pursuant to this Section 2.06 shall bear interest from the Closing Date through the date of payment at the interest rate per annum equal to the prime rate as published in The Wall Street Journal on the Friday before the payment is to be made.

(h)           If the delivery deadline date for the Initial Closing Statement or the Objection Deadline Date is a day that is not a Business Day, the applicable delivery deadline date shall be the immediately following Business Day.

SECTION 2.07.   Designated Purchaser .  After the date of this Agreement but not less than five (5) Business Days prior to the Closing Date, the Purchaser may, upon prior written notice to the Seller, designate (a “ Designation ”) either one or more wholly-owned subsidiaries of the Purchaser, whether or not existing as of the date hereof, as a “Designated Purchaser” hereunder (each such Person, a “ Designated Purchaser ”).  The Designation shall set forth:  (a) the name of the Designated Purchaser, (b) the jurisdiction of organization of the Designated Purchaser, (c) the Company Shares or Holdco Shares that the Designated Purchaser shall acquire at the Closing and (d) an acknowledgment of the Designation by the Designated Purchaser in accordance with the following sentence.  Upon the Designation, each Designated Purchaser shall be deemed a “Purchaser” for purposes of this Agreement in connection with the acquisition of such Shares (and any reference to “Purchaser” herein in connection therewith shall automatically be deemed to include reference to such Designated Purchaser) and such Designated Purchaser shall automatically be assigned the rights and obligations under this Agreement necessary in connection with such Designation; provided , that following such Designation:  (i) the Purchaser shall be jointly and severally liable with each such Designated Purchaser (on the one hand) to the Seller (on the other hand) for all such rights and obligations so assigned to such Designated Purchaser and (ii) the Purchaser shall cause each Designated Purchaser to appoint either the Purchaser or another Designated Purchaser (or in the event there is only one Designated Purchaser, such Designated Purchaser) as its agent in connection with the exercise of its rights and remedies under this Agreement.  No such Designation shall relieve the Purchaser of its obligations hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE SELLER

The Seller hereby represents and warrants to the Purchaser (i) as of the date hereof and (ii) as of the Closing Date (unless in the case of clause (ii) specifically made by its terms as of another date, in which case as of such specified date), subject to such exceptions as are disclosed in writing in the Disclosure Schedules, as follows:

SECTION 3.01.   Organization, Authority and Qualification of the Seller .  The Seller is a legal entity duly organized and validly existing under the Laws of the State of Delaware and has all necessary power and authority to enter into this Agreement and the Ancillary Agreements to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by

 

 

it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect.  The execution and delivery by the Seller of this Agreement and the Ancillary Agreements, the performance by the Seller of its obligations hereunder and thereunder and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the Seller.  This Agreement has been, and upon its execution, each Ancillary Agreement shall have been, duly executed and delivered by the Seller, and (assuming due authorization, execution and delivery by the Purchaser) this Agreement constitutes, and upon its execution, each Ancillary Agreement (assuming due authorization, execution and delivery by the other parties thereto) shall constitute, legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

SECTION 3.02.   Organization, Authority and Qualification of the Morton Entities; Holdco .  (a) Each of the Morton Entities and Holdco is a legal entity duly organized, validly existing and (where applicable) in good standing under the Laws of the jurisdiction of its organization and has all necessary power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it is currently conducted.  Each of the Morton Entities and Holdco is duly licensed or qualified to do business and (where applicable) is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect.

(b)           The Seller has made available the Purchaser complete and correct copies of the Governing Documents of each Morton Entity and each JV Entity as currently in effect.

(c)           Section 1.01(b) of the Disclosure Schedule contains a true, accurate and complete list of all Subsidiaries.

(d)           Holdco was incorporated for the sole purpose of holding the JV Interest and has no interest in, or claim over or to, any assets other than the JV Interest and the amount of cash representing the initial capital contribution of Holdco.  Since its incorporation Holdco has not engaged in any trade or business, employed any Person or incurred any Liability, other than, in each case, incidental to its organization.  Except as may arise out of the Governing Documents of any JV Entity, neither Holdco, nor any Morton Entity, has any Liability to, or with respect to, any JV Entity.

SECTION 3.03.   Capitalization; Ownership of Shares .  (a) Section 3.03(a) of the Disclosure Schedule sets forth with respect to each Morton Entity, Holdco and each of the JV Entities its name, the jurisdiction of its organization, its outstanding shares of capital stock or other ownership interests and the current ownership, record and beneficial, of such shares or other ownership interests.

(b)           All of (x) the Shares, (y) all of the issued and outstanding shares of capital stock or other ownership interests of the Subsidiaries (the “ Subsidiary Shares ”) and (z) the Relevant Proportion of all of the issued and outstanding shares of capital stock or other ownership interests of the JV Entities (the “ JV Shares ”) are owned of record and beneficially, directly or indirectly, by the Seller free and clear of all Encumbrances, other than those that will be removed prior to Closing.  All of the Shares, the Subsidiary Shares and the JV Shares have been duly authorized and validly issued and are fully paid and non-assessable and were not issued in violation of any right of first refusal, purchase option, call option, subscription right, preemptive right or any similar right.

(c)           There are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments relating to the Shares or the Subsidiary Shares or obligating the Seller, Holdco or any Morton Entity to issue or sell any shares of capital stock of, or any other interest in, Holdco or any Morton Entity to any third person nor are there any voting trusts, stockholder agreements, proxies or other agreements or understandings with third parties in effect with respect to the voting or transfer of any of the Shares or the Subsidiary Shares.  There are no bonds, debentures, notes or other Indebtedness of, Holdco or any Morton Entity having, absent default, the right to vote (or that are convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Shares or Subsidiary Shares may vote, or whose holders' consent is required in connection with this Agreement or by the Ancillary Agreements.

(d)           Other than as made available to the Purchaser prior to the date hereof, there are no stockholders’ agreements or other similar agreements with respect to the JV Entities and there are no interests in any JV Entity held by any third party other than as identified in such documents.  None of the Morton Entities, Holdco nor any of the JV Entities have any outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights.  Other than the Morton Entities, Holdco and the JV Entities, there are no other corporations, partnerships, joint ventures, or other entities in which Holdco, any Morton Entity or any JV Entity owns, of record or beneficially, any direct or indirect equity or other interest or any right to acquire the same.  Upon the transfer of the Shares to the Purchaser on the Closing Date in accordance with this Agreement, the Seller will deliver to the Purchaser good and valid title to the Shares, free and clear of all Encumbrances other than restrictions imposed by applicable securities Laws.

SECTION 3.04.   No Conflict .  Assuming compliance with the pre-merger notification and waiting period requirements of the HSR Act and the Competition Act and the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions referred to in Section 3.05, and except as may result from any facts or circumstances relating solely to the Purchaser, the execution, delivery and performance of this Agreement and the Ancillary Agreements by the Seller does not and will not (a) violate, conflict with or result in the breach of the Governing Documents of the Seller, Holdco or any Morton Entity, (b) conflict in any material respect with or violate in any material respect any Law or Governmental Order applicable to the Seller, Holdco or any Morton Entity or (c) (i) conflict in any material respect with, result in any material breach of, constitute a material default (or event which with or without the giving of notice or lapse of time, or both, would become a material default) under, require any consent under, or give to others any rights of termination, amendment, acceleration,

 

 

suspension, revocation, or cancellation of, any Material Contract or, (ii) in the case of any written contract or agreement to which any Morton Entity is a party that is not a Material Contract, conflict in any respect with, result in any breach of, constitute a default (or event which with or without the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation, or cancellation of, any such contract or agreement, except, in each case, as would not be material to the Morton Entities, taken as a whole).

SECTION 3.05.   Governmental Consents and Approvals .  The execution, delivery and performance of this Agreement and the Ancillary Agreements by the Seller does not and will not require any consent, approval, authorization or Governmental Order or declaration of, action by, filing with, notification to or Permit from, any Governmental Authority, other than (a) compliance with, and filings required under, the HSR Act and the Competition Act, and (b) any additional consents, approvals, authorizations, filings and notifications under any other applicable antitrust, competition, or trade regulation Law, except (i) where the failure to obtain any such consent, approval, authorization or action, or to make any such filing or notification would not be material or would not prevent or materially delay the consummation by the Seller of the transactions contemplated by this Agreement and the Ancillary Agreements, or (ii) as may be necessary as a result of any facts or circumstances relating solely to the Purchaser or any of its Affiliates.

SECTION 3.06.   Financial Information .  (a)  True and complete copies of each of (i) the unaudited consolidated balance sheet of the Company as of December 31, 2006 and December 31, 2007, and the unaudited consolidated statements of income and cash flows of the Company for the annual periods ended on December 31, 2006 and December 31, 2007 (collectively, the “ Company Financial Statements ”) and (ii) the Reference Balance Sheet and the unaudited consolidated statement of income of the Business for the annual period ended on December 31, 2008 (collectively, the “ Business Financial Statements ”) have been made available by the Seller to the Purchaser and are set forth on Section 3.06(a) of the Disclosure Schedule.

(b)           The Company Financial Statements (i) were properly derived from the consolidated financial statements and accounting records of the Seller, (ii) properly include adjustments for instances where the adjustments were material to the Company but were not material for the Seller’s financial statements, (iii) can properly be reconciled with the books and records of the Company, (iv) present fairly in all material respects the consolidated financial position, results of operations and cash flows of the Company as of the dates thereof and for the periods covered thereby and (v) were prepared in accordance with GAAP, consistently applied.

(c)           The Business Financial Statements (i) were properly derived from the audited financial statements of Seller (in each case, as such audited financial statements were included in the Seller’s Annual Report on Form 10-K, filed by the Seller with the US Securities and Exchange Commission for the applicable fiscal year of the Seller), (ii) were prepared in accordance with the books of account and other financial records of the Morton Entities (except as may be indicated in the notes thereto), (iii) can properly be reconciled with the books and records of the Morton Entities and (iv) present fairly in all material respects the consolidated

 

 

financial position and results of operations of the Business, as of the dates thereof or for the periods covered thereby and (v) were prepared in accordance with GAAP, consistently applied.

(d)           The 2008 Company Financial Statements, when prepared, (i) shall be properly derived from the consolidated financial statements and accounting records of the Seller, (ii) shall properly include adjustments for instances where the adjustments were material to the Company but were not material for the Seller’s financial statements, (iii) shall be able to be properly reconciled with the books and records of the Company and (iv) shall present fairly in all material respects the consolidated financial position, results of operations and cash flows of the Company as of the dates thereof and for the periods covered thereby and (v) will be prepared in accordance with GAAP, consistently applied.

SECTION 3.07.   Absence of Undisclosed Material Liabilities; Indebtedness .  (a) The Company and the Subsidiaries do not have any material Liabilities of a nature required to be reflected on a balance sheet prepared in accordance with GAAP, except: (i) as disclosed, reflected or reserved against in the Reference Balance Sheet, (ii) for items set forth in the Disclosure Schedule and (iii) for liabilities and obligations incurred in the ordinary course of business consistent with past practice since the Reference Balance Sheet Date and not in violation of this Agreement.  Except as shown in the Reference Balance Sheet and expressly described in the notes to the Company Financial Statements and Business Financial Statements, neither the Company nor any Subsidiary is directly or indirectly liable upon or with respect to (by discount, repurchase agreements or otherwise), or obligated in any other way to provide funds in respect of, or to guarantee or assume, any debt, obligation or dividend of any Person, except endorsements in the ordinary course of business (consistent with past practice) in connection with the deposit of items for collection.

(b)           The Company’s system of internal controls over the Business’ financial reporting is sufficient, in all material respects, to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP.

SECTION 3.08.   Conduct in the Ordinary Course .  (a) Since December 31, 2007, there has not occurred any Material Adverse Effect, (b) since the Reference Balance Sheet Date, (i) the Morton Entities have conducted their businesses in the ordinary course of business consistent with past practices and (ii) no action has been taken by the Seller or any Morton Entity that would, if taken after the date of this Agreement, constitute a breach of Sections 5.01(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k) or, with respect to renewals of Material Contracts, Section 5.01(m) of this Agreement.

SECTION 3.09.   Litigation; Governmental Orders .  (a)  There is no Action by or against any Morton Entity, or by or against the Seller (to the extent relating to any Morton Entity), pending or, to the Seller’s Knowledge, threatened before any Governmental Authority and (b) there is no Governmental Order to which any Morton Entity or any of its assets or properties are subject that, in the case of (a) and (b), would be material to the Morton Entities, taken as a whole, or would affect the legality, validity or enforceability of this Agreement, the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby.

SECTION 3.10.   Compliance with Laws; Permits .  (a) Except with respect to Environmental Laws, the Morton Entities and Holdco have each conducted their businesses in all material respects since January 1, 2003 and conduct their businesses in all material respects in accordance with all Laws and Governmental Orders to which they are subject and none of the Seller, Holdco or any Morton Entity is in violation in any material respect of any such Law or Governmental Order.

(b)           All Permits material to the conduct of the Business (the “ Material Permits ”) have been obtained by the applicable Morton Entity and are valid and in full force and effect.  Section 3.10(b) of the Disclosure Schedule lists all current Material Permits.  All fees and charges with respect to the Material Permits as of the date hereof have been paid in full.  No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Material Permit.

SECTION 3.11.   Intellectual Property .  (a)  Section 3.11(a) of the Disclosure Schedule contains a list of each item of Registered Owned Intellectual Property, specifying as to each item of such Registered Owned Intellectual Property, as applicable:  (i) the owner of such Registered Owned Intellectual Property; (ii) the jurisdictions by or in which such Registered Owned Intellectual Property has been issued or registered or in which an application for such issuance or registration has been filed; and (iii) the registration or application numbers thereof.

(b)           The Morton Entities have the right to use the Owned Intellectual Property and, to the Seller’s Knowledge, the Licensed Intellectual Property, in connection with the conduct of the Business as currently conducted.

(c)           To the Seller’s Knowledge, the use of the Morton Intellectual Property by the Morton Entities in connection with the conduct of the Business as currently conducted does not infringe, misappropriate or otherwise violate any valid, enforceable and unexpired Intellectual Property of any other Person.  There is no Action initiated by any Person pending or, to the Seller’s Knowledge, threatened in writing, against any Morton Entity or the Seller (to the extent relating to any Morton Entity): (i) challenging, or seeking to deny or restrict, the rights of any Morton Entity in any of the Morton Intellectual Property, (ii) alleging that the use of the Morton Intellectual Property or any services provided, processes used or products manufactured, used, imported or sold with respect to the Business do or may misappropriate, infringe or otherwise violate any Intellectual Property of any Person, or (iii) alleging that any Morton Entity has infringed, misappropriated or otherwise violated any Intellectual Property of any other Person; provided , that for purposes of this clause (c), any Action that has been initiated but with respect to which process or other comparable notice has not been served on or delivered to a Morton Entity or Seller shall be deemed to be “threatened” rather than “pending”.

(d)           A Morton Entity owns all right, title and interest in each item of Registered Owned Intellectual Property, free and clear of any Encumbrances other than Permitted Encumbrances.  Each item of Registered Owned Intellectual Property is in full force and effect and has not been adjudged invalid or unenforceable.

(e)           No Person is infringing, misappropriating or otherwise violating any Owned Intellectual Property in any manner that would reasonably be expected to have a Material

 

 

Adverse Effect and, to the Seller’s Knowledge, no Person is engaging in any material infringement, misappropriation or other violation of any Owned Intellectual Property.

(f)           Either Seller or the Morton Entities have taken reasonable steps in accordance with generally accepted industry practices to maintain the confidentiality of all material Morton Intellectual Property of a confidential nature, including material trade secrets.

(g)           To the Seller’s Knowledge, (i) none of the Registered Owned Intellectual Property is the subject of a pending trademark or service mark opposition or cancellation proceeding, and (ii) none of the patents and patent applications included in the Owned Intellectual Property is the subject of a pending interference, protest, public use proceeding or request for reexamination.

(h)           The representations and warranties contained in Section 3.11(c) and Section 3.11(e) are the only representations and warranties being made by the Seller in this Agreement with respect to any activity that constitutes, or otherwise relates to, infringement, misappropriation or other violation of Intellectual Property.

SECTION 3.12.   Real Property .  (a)  Section 3.12(a) of the Disclosure Schedule lists each parcel of real property owned by the Morton Entities, except the Retained Real Property, identified by its street address for the US and Canadian properties, other than the undeveloped parcels of land for which no street addresses are available (the “ Owned Real Property ”).  The Morton Entities own all of the Owned Real Property with good and valid title, free and clear of all Encumbrances, other than Permitted Encumbrances.

(b)           Section 3.12(b) of the Disclosure Schedule lists the street address of each parcel of real property leased, subleased, or licensed by any Morton Entity which has an annual lease, sublease or license rate in excess of $500,000 (the “ Leased Real Property ”) and there is no oral or other non-written agreement for the lease, sublease or license of real property by any Morton Entity for a charge in excess of $500,000 annually.  Assuming good fee title vested in the applicable landlord, each Morton Entity has a valid, binding and, to Seller’s Knowledge, enforceable leasehold interest in the Leased Real Property of which such Morton Entity is the lessee, sublessee or licensee, free and clear of all Encumbrances, except Permitted Encumbrances, and none of the Morton Entities have received written notice that they are in breach of or default under any such lease, sublease or license, and, to Seller’s Knowledge, no event has occurred which, with notice, lapse of time or both, would constitute a material breach or default by any Morton Entity or permit termination, modification or acceleration by any Person thereunder.

(c)           Except as set forth in Section 3.12(c) of the Disclosure Schedule, none of the Morton Entities have leased any Owned Real Property, Leased Real Property or any portion thereof and, to Seller’s Knowledge, there are no outstanding purchase options, rights of first offer or rights of first refusal granted to any Person to purchase or lease such Owned Real Property, Leased Real Property or any portion thereof or interest therein.

(d)           Except as set forth in Section 3.12(d) of the Disclosure Schedule, no written notice of any current or future condemnation, requisition, expropriation or taking by any

 

 

Governmental Authority has been received with respect to the whole or any material portion of the Owned Real Property or the Leased Real Property and to Seller’s Knowledge, no condemnation, requisition, expropriation or taking by any Governmental Authority of the whole or any material portion of the Owned Real Property or the Leased Real Property is threatened or contemplated.

(e)           To the Seller’s Knowledge, the Owned Real Property and Leased Real Property are in material compliance with all applicable building, zoning, subdivision, health and safety, other land use and all other related Laws, except where the failure or omission to so comply would not, individually or in the aggregate, be material to the Morton Entities, taken as a whole, and, to the Seller’s Knowledge, the current use and occupancy of the Owned Real Property and the Leased Real Property do not materially violate any such Laws.

SECTION 3.13.   Employee Benefit Matters .  (a)   Plans and Material Documents .  Section 3.13(a) of the Disclosure Schedule lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)), all material stock option, stock purchase, restricted stock, deferred compensation, retiree medical or life insurance, health, dental, disability, sick leave, vacation, welfare, fringe, pension, retirement, supplemental retirement, or other benefit plans or programs to which the Seller or any Morton Entity is a party, with respect to which the Seller or any Morton Entity has any obligation or which are maintained, contributed to or sponsored by the Seller or any Morton Entity for the benefit of any Morton Employee (collectively, the “ Plans ”).  The Seller has made available to the Purchaser a true and complete copy of each Plan.

(b)           Section 3.13(b) of the Disclosure Schedule lists each Plan that is sponsored by any Morton Entity, or that will be transferred to or assumed by any Morton Entity, the Purchaser or its Affiliates under this Agreement (each, a “ Transferred Plan ”).  None of the Transferred Plans is a material individual employment, consulting, bonus, incentive, termination, severance, change in control or other similar contract or arrangement, entered into with any Morton Employee with respect to which any Morton Entity shall have any obligation on or after the Closing Date.  Each Transferred Plan has been established, operated, administered and invested in all material respects in accordance with its terms, the terms of any applicable collective bargaining agreement and the requirements of all applicable Laws.  Each of the Seller and the Morton Entities has performed all material obligations required to be performed by it and made all required contributions under, is not in any material respect in default under or in material violation of, and, to the Seller’s Knowledge, there is no material default or violation by any other party to, any Transferred Plan.  No Action is pending or, to the Knowledge of the Seller, threatened with respect to any Transferred Plan (other than claims for benefits in the ordinary course) and, to the Knowledge of the Seller, no fact or event exists that could give rise to any such Action.

(c)           None of the Transferred Plans is: (i) a “multiemployer plan” (within the meaning of Section 3(37) of ERISA) or a multi-employer pension plan pursuant to any applicable Laws; (ii) a “multiple employer plan” (within the meaning of Section 413(c) of the Code); (iii) a “voluntary employees’ beneficiary association” (within the meaning of Section 501(c)(9) of the Code); (iv) a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA); or (v) subject to Title IV of ERISA or Section 412 of the

 

 

Code.  No employee of any JV Entity, except to the extent such an employee is also a Morton Employee, participates in any Transferred Plans.

(d)           The Seller has made available to the Purchaser true and complete copies of all documents, plan texts and amendments, funding and insurance agreements and summary plan descriptions of the Transferred Plans or summary descriptions of any such Transferred Plan not otherwise in writing.  The Seller has made available to the Purchaser true and complete copies of the most recent determination letters and opinion letters and the actuarial reports for the most recent three plan years with respect to any Transferred Plan, including all schedules thereto and financial statements with attached opinions of independent accountants.  All information not subject to applicable privacy Laws necessary to administer each Transferred Plan, and all data and plan documentation necessary to discharge the obligations set forth in Section 6.01 and 6.02, shall be delivered to Purchaser at least 15 days prior to Closing; all other relevant information shall be provided as soon as reasonably possible following the Closing.

(e)           Except as set forth on Section 3.13(e) of the Disclosure Schedule or to the extent necessary to satisfy an obligation under a current collective bargaining agreement assumed by the Purchaser upon Closing, no Transferred Plan provides for or continues medical or health benefits, or life insurance or other benefits (through insurance or otherwise) for any Person or any dependent or beneficiary of any Person after such Person’s retirement or other termination of employment except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, Section 4980B of the Code, Title I Part 6 of ERISA, and any similar state group health plan continuation law, together with all regulations promulgated thereunder.  

(f)           Each Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has timely received a favorable determination letter from the Internal Revenue Service covering all of the provisions applicable to the Plan for which determination letters are currently available that the Plan is so qualified and each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code has received a determination letter from the Internal Revenue Service that it is so exempt, and no fact or event has occurred since the date of such determination letter or letters from the Internal Revenue Service to adversely affect the qualified status of any such Plan or the exempt status of any such trust.

(g)           Except with respect to the Transferred Plans, the benefits required under Section 6.02(c)(ii), and post-retirement welfare benefits required under any collective bargaining agreement assumed by Purchaser at Closing, neither any Morton Entity, the Purchaser nor any of its Affiliates shall incur, or could reasonably be expected to incur, by operation of law or otherwise, any liability with respect to, or in any way related to, any plan subject to Title IV of ERISA (including without limitation, any multiemployer plan) or any post-retirement welfare plan or arrangement.

(h)           The value, at the Closing Date, of the accumulated post-retirement benefit obligation (as defined by SFAS No. 106) for retiree medical and life insurance benefits to be provided to any Active Morton Employees employed at Morton Entities in the US who retire on and after the Closing Date (and their covered dependents), determined using the assumptions

 

 

used in the 12/31/2008 year-end SFAS No. 158 plan disclosures, except that the discount rate actually used by such plan in such year-end disclosures shall be updated to reflect any changes in such discount rate between year-end and the Closing Date, does not exceed the amount set forth in Section 3.13(h) of the Disclosure Schedule.

SECTION 3.14.   Labor Matters .  Section 3.14 of the Disclosure Schedule lists each collective bargaining agreement that is applicable to the current Morton Employees in the US and Canada, except for those agreements required by other applicable foreign Law.  As of the date hereof, (a) there are no strikes or lockouts with respect to any Morton Employee pending or, to the Knowledge of the Seller, threatened, (b) there is no union organizing effort pending or, to the Knowledge of the Seller, threatened against any Morton Entity, (c) except as set forth on Section 3.14(c) of the Disclosure Schedule, there is no unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the Knowledge of the Seller, threatened with respect to any Morton Employee, (d) there is no slowdown, boycott or work stoppage in effect or, to the Knowledge of the Seller, threatened with respect to the Morton Employees, (e) no Morton Entity is delinquent in any material respect in payments to any Morton Employee for any wages, salaries, commissions, bonuses or other material amount of direct compensation for any services performed for it or amounts required to be reimbursed to such employees, (f) each Morton Entity is in compliance in all material respects with (i) all Laws and Governmental Orders respecting labor, employment, fair employment practices, immigration, terms and conditions of employment including, without limitation, all Laws and Governmental Orders related to Taxes, employment standards, workers’ compensation, occupational health and safety, disability benefits, wages and hours, termination of employment, human rights, pay equity and employment discrimination and (ii) all Laws relating to employment, including those respecting affirmative action and equal employment opportunity obligations, arising under or in connection with any Contract with any Governmental Authority or any related subcontract.

SECTION 3.15.   Taxes .

(a)           All material Tax Returns required to have been filed by or with respect to the Morton Entities, any Affiliated Group of which a Morton Entity has been a member since 2000, and Holdco have been timely filed (taking into account any extension of time to file granted or obtained) and all the information contained in such Tax Returns is correct and complete in all material respects and reflects accurately all liabilities for Taxes for the period covered by such Tax Returns;

(b)           all Taxes shown as payable on such Tax Returns have been paid or will be timely paid;

(c)           no deficiency for any material amount of Tax has been asserted or assessed by a Governmental Authority in writing against any Morton Entity, any Affiliated Group of which a Morton Entity has been a member since 2000 or Holdco that has not been satisfied by payment, settled or withdrawn;

(d)           there are no Tax liens on any assets of any Morton Entity or Holdco (other than Permitted Encumbrances);

(e)           neither of the Morton Entities or Holdco is party to or bound by any Tax sharing agreement, Tax indemnity obligation or similar agreement with respect to Taxes (including any private letter ruling, advance pricing agreement, closing agreement or other contract relating to Taxes with any Governmental Authority);

(f)           the Morton Entities and Holdco have complied with all Laws relating to the payment and withholding of Taxes and have, within the time and in the manner prescribed by Law, withheld from and paid over to the proper Governmental Authorities all amounts required to be so withheld and paid over under Law;

(g)           none of the Morton Entities or Holdco has participated in, is obligated to participate in or is currently negotiating participation in any transaction that is a listed transaction within the meaning of Regulations Section 1.6011-4(b)(2) or, subsequent to 2004, has been a “material advisor” within the meaning of Regulations Section 301.611-3(b);

(h)           To the best of Seller’s Knowledge no material Tax Return of a Morton Entity, any Affiliated Group of which any Morton Entity is a member or Holdco is under audit or examination by any Governmental Authority and no notice of such an audit or examination has been received by a Morton Entity, Holdco or relevant Affiliated Group;

(i)           the Morton Entities and Holdco have made available to the Purchaser for inspection (i) complete and correct copies of all material Tax Returns of the Morton Entities and Holdco relating to Taxes for all Tax periods for which the applicable statute of limitations has not yet expired and (ii) complete and correct copies of all material private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement contracts and pending ruling requests, submitted by, received by or agreed to by or on behalf of any Morton Entity and subsequent to 2005;

(j)           At no time during the 60 month period ending immediately prior to Closing was more than 50% of the fair market value of the Company Shares derived directly or indirectly from one or any combination of real property situated in the Province of Quebec or Quebec Resource Properties; and

(k)           Seller is a resident of the US and a “qualifying person” for purposes of the Canada-US Tax Convention (1980), as amended; and

(l)           The financial statements of the JV Entities for those taxable years prior to 2007 reflect any reserves required to be shown under the applicable accounting principles, and in respect of the relevant period to which such accounts relate, for all Taxes assessed or required to be assessed on the JV Entities.

SECTION 3.16.   Material Contracts .  (a)  Section 3.16(a) of the Disclosure Schedule lists each of the following written contracts and agreements to which any Morton Entity is a party in effect as of the date of this Agreement (such contracts and agreements so required to be disclosed, being “ Material Contracts ”):